Tip Jar

1/07/2009

What About Charlie? Homes, Homes, Homes

First we find out that Charlie has four apartments which are rent-controlled in a very prestigious building in his home District in New York. The purpose of which is to keep rents affordable to the normal citizens, one would wonder why such a rent stabilization program would be needed in a luxury apartment complex with door men and such but oh well it is New York. His place of domicile was not the issue, though one wonders how a mere public servant affords such places. The problem was that he used one of the four apartments for an office. This is a no no evidently when your rent by law is being trimmed to artificially low levels. Not to mention some other possible problems with Congressional ethic rules.

Some Congressional ethics experts, while saying it appears legitimate for Mr. Rangel to have one rent-stabilized apartment, question whether his acceptance of the additional units may violate the House of Representatives’ ban on members’ accepting gifts of more than $100. They suggest that the difference between what Mr. Rangel pays for the second, third and fourth apartments and what a new market-rate tenant would pay — some $30,000 annually — could be considered a gift because it is given at the discretion of the landlord and it is not generally available to the public.

Next, we find out that Charlie has a "villa" in a very exclusive resort in the Dominican Republic. Putting aside how our frugal congressman has come upon the means to own four apartments in a luxury complex in New ork and a "villa" in paradise, our dedicated writer of tax laws, failed to pay the taxes on income derived from the rental of the "villa" when not in residence. Us non "ruling class" people and typically the IRS night call that tax evasion. He also, on occasion, failed to disclose this information as required on Congressional disclosure forms.

Of course this must all be a simple clerical error, after all here is what his top aide had to say when the New York Post inquired

His chief of staff, George Dalley, who prepares the congressman's financial disclosure forms, said it's possible Rangel is a "shareholder" in the company that owns the resort.

In 2006 and 2007 or other years, Rangel may have "plowed the [rental] money back" into the company, Dalley said.

But in 20 years of filings, Rangel has never disclosed owning or acquiring any shares or interest in the company, Grupo Punta Cana. The company also owns and operates an international airport, three luxury housing developments, a shopping village, golf courses, a spa, seven restaurants and a marina.

Now as bad as that sounds to me, that the guy who files your disclosure forms, says that the boss "might" be a shareholder in the property and it's "possible" that he may have invested, he obviously learned from his boss. When asked about this seemingly, dare we say illegal act our erstwhile congressman through his lawyer of course-blamed his wife.

Mr. Davis said the congressman did not realize he had to declare the money as income, and was unaware of the semiannual payments from the resort because his wife, Alma, handled the family finances and conferred with their accountant, John Viardi, on tax matters.

Comforting isn't it, the congressman overseeing our tax codes "did not realize he had to declare the money as income" I wonder if that will work for us common folk?

Of course when he had to go before the press himself and explain why he thought his $75,000 of income was tax free, he couldn't blame his wife in person, that would cause trouble mi casa. So being the problem was A Dominican Republic problem he pulled a reverse Sammy Sosa "No Hablo Espanol"

"I really don't believe that making mistakes means you have to give up your career," he said, although he admitted that, as chairman, he should be held to a higher standard.

He blamed the managers at the resort for not sending him annual financial statements, and when they did so, for sending them in Spanish.

"Well, there always been a question in my wife's mind," Rangel said of his wife, Alma, who he said handles the finances.

"I belittled the importance of the fact that I wasn't getting reports."

He added that he reached out to officials at the resort for more information - to no avail.

"Every time I thought I was getting somewhere, they'd start speaking Spanish," he said of his Dominican business partners.

Well he only sort of threw Alma under the bus. Enough of luxury apartments and villas in paradise it is time to go to Washington where a congressman belongs, but in Charlie's case, probably not.

You see our powerful Congressman with the villa in Paradise and the luxury apartment in New York,also owned a home in Washington DC. A house in Washington which he claimed Homestead exemption. Now, as a homeowner I know that you only get one of those and it has to be on your primary residence. Well was this home in DC Charlie's primary residence? Must have been, he claimed it was for the exemption, but what about those luxury apartments up there in New York, I thought they had to be your primary residence to get that rent deal? Exactly.

The situation raises a number of potential problems for the congressman, including:

* New York City law requires that tenants use rent-stabilized apartments as their primary residence.

* DC's real Property Homestead Deduction Act also requires that a property receiving the benefit be a primary residence.

* Tax lawyers told The Post that a property owner cannot have two primary residences - or take advantages provided to primary residences at two different addresses simultaneously.

* DC's law also requires that the owner of a property benefiting from the tax break be a personal-income taxpayer in DC. District law exempts members of Congress from paying personal DC income tax, but they must pay property tax.

The DC rules state that "by maintaining a residence in his home state and actively voting there, [a member of Congress] is demonstrating that he continues to be a part of the body politic of his home state . . . The Member is a domiciliary of his home state. Because he is not domiciled in the District, the Member cannot claim the District's homestead deduction."

The agency would not allow The Post to view original tax documents, such as Rangel's applications, despite repeated requests.

However, Wagner provided spreadsheets showing Rangel's reduced tax bills for the years 1995 through 2000, along with this written statement: "According to records . . . the subject account received the homestead benefit for the tax years provided in the report."

At this point you would have to conclude that Congressman Rangel is inept in managing or overseeing the management of his vast property holdings, or that he has defrauded not only his home state, The District of Columbia and the IRS. In addition he has not accurately, at the minimum, or knowingly ignored proper Congressional disclosure. Perhaps that is the reward for being constantly described as "The Powerful Chairman..."

However I have run long here so we will discuss Charlie's further adventures in hopefully the final installment of What About Charlie? The School of Public Service and Sons